Fed Takes Action on ABCT, Ends Orders with Two Minn. Banks

The Federal Reserve Board has taken action against ABCT Holdings in Waco, Tex. and terminated regulatory orders with two Minnesota lenders.

Regulators at the Federal Reserve Bank of Dallas entered into a written agreement with ABCT Holdings on Aug. 5, the Fed announced Thursday. The agreement bars the $189 million-asset company from paying dividends without prior written approval. ABCT Holdings, the holding company for Alliance Bank Central Texas, is further required to seek approval before buying debt or redeeming stock.

The agreement also demands that ABCT provide written plans to improve internal controls and project cash flow for debt service and operating expenses within 30 days.

ABCT Holdings had a Tier 1 leverage ratio of 9.6% and total risk-based capital of 16.7% as of March 31, 2013, according to the Federal Deposit Insurance Corp. It lost $1.5 million in 2012 and earned $76,000 in the first quarter of 2013. Second-quarter data was not available.

The Fed also released Community Pride Bank in Ham Lake, Minn. and Bankwest Financial in Rockford, Minn. from prior written agreements signed in 2011.

Community Pride, with $87 million of assets, had a Tier 1 leverage ratio of 11% and total risk-based capital of 16.5% in the second quarter of the year. Last week, the Treasury Department auctioned $5 million worth of shares in the company, for which it paid $4.4 million under the Troubled Asset Relief Program.

The $104-million asset Bankwest, was freed from actions taken by the Federal Deposit Insurance Corp. in June. It had a Tier 1 leverage ratio of 8.9% and total risk-based capital of 12.3% as of June 2013.